Archive for March 25th, 2008

We’ve all watched gas prices soar over the last few months reaching levels none of us thought we’d ever pay. But what is even more surprising to me is the way that diesel fuel has increased disproportionately to all other fuels! I have a theory about that – and it goes directly to making the public “feel good” about paying over $3 a gallon for gas.

First I believe all gas prices are too high – not because of the record prices we are paying per barrel for oil BUT because fuel companies are making huge billon dollar profits on the sale of their product to the public. They would say that are doing what is right for the shareholders. I say they are taking advantage of a bad situation and abusing the general populace by “defrauding” us all with prices that are higher than necessary.

Diesel is a less refined product than gasoline, significantly less expense is involved in manufacturing it. Yet diesel fuel is almost $1 higher per gallon than gas. Why? Well, if oil companies are going to make these kinds of profits, they won’t make them on the backs of already financially-strapped individuals and families. I believe gasoline would be much higher if these companies charged the proportionate amount to manufacture them. I believe they are passing along the costs associated with refining gasoline to those of us who buy diesel fuel. This helps people feel better about the fact that they are only paying $3.40 a gallon for gas instead of $5 gallon. I’m betting that diesel fuel would cost about $2.50 gallon right now even with the rising prices of oil per barrel. Oil companies realize they can get those extra dollars from “corporate America” because everything in America moves by truck!

What is clearly hurting our economy (besides banks who took advantage of people who didn’t think about how they were going to pay for their house before buying it – sending the housing market into a tailspin), would be that companies are now passing along the higher costs of diesel fuel THE CONSUMER!

In the end, you might not be paying $5 a gallon for gas BUT you are paying twice as much for essentials like milk, bread, produce, etc.

So while big oil companies make billions of dollars in profits (that is free enterprise), the rest of us are paying more for everything we need.